Millions of public sector workers face a brutal pay squeeze as Rishi Sunak and Jeremy Hunt plan taking the axe to public spending to balance the nation’s books.

The Treasury is thought to be considering public sector pay rises of 2 per cent across the board in 2023-24. With inflation forecast to stay around 9.5 per cent for most of next year, this amounts to a politically explosive real terms pay cut of 7.5 per cent for teachers, soldiers, police officers and nurses, not to mention civil servants. Public sector pay rises of 5 per cent this year have already led to threats of industrial action.